GBP/USD – 1H.
According to the hourly chart, the GBP/USD pair quotes on Wednesday performed a reversal in favor of the US currency and fell to the lower border of the sideways trend corridor. The rebound of quotes from this line will allow traders to count on a reversal in favor of the British dollar and some growth in the direction of the Fibo level of 200.0% (1.4216), near which the upper line of the side corridor is located. Closing the pair's rate under the corridor will significantly increase the chances of continuing the fall in the direction of the levels of 1.4064 and 1.4008. Today, the information background for the pound/dollar pair will be weaker than for the euro/dollar pair. The only thing that traders will have to pay attention to today is the US inflation report for May. Traders expect that inflation will continue to accelerate from the current 4.2% y/y to 4.7% y/y. If this forecast comes true, the Americans may be under pressure again today.
Rising inflation is a cause for concern for all investors and traders from the United States. In the European Union, the consumer price index rose to just 2%. In America, it is already 2% higher than the Fed's target level. The regulator believes that the increase in inflation is a temporary phenomenon. However, market participants are not sure about this and accuse the Fed of inaction. Thus, rising inflation is a downward factor for the US currency. Together with the rebound from the lower border of the side corridor, it can give a strong signal to buy. Bank of England representative Andy Haldane will also provide a speech today. Attention to the Bank of England is also high now, as there have been statements about the possible end of the program of assistance to the economy and even an increase in the key rate in early 2022. In these circumstances, any new statement by a representative of the Bank of England may have a high value for the British dollar, which has been in the side corridor for more than three weeks.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair rebounded from the corrective level of 0.0% (1.4240), turned in favor of the US currency, and began the process of falling in the direction of the lower border of the upward trend corridor. Closing the pair's rate under the corridor will favor a further drop in quotes with targets of 1.4003 and 1.3870 and will change the mood of traders to "bearish."
GBP/USD – Daily.
On the daily chart, everything still rests on the trend line, along which the movement of quotes continues. The closing of the pair's rate under this line will favor the US dollar and the beginning of the fall in the direction of the corrective level of 100.0% (1.3513). Until this happens, the growth process can be resumed at any time in the direction of the corrective level of 161.8% (1.4812).
GBP/USD – Weekly.
The pound/dollar pair completed a close over the second downward trend line on the weekly chart. Thus, the chances of long-term growth of the pound remain.
Overview of fundamentals:
There were no major economic events in the UK and the US on Wednesday. There was no background information.
US and UK news calendar:
UK - Bank of England MPC Member Andy Haldane will deliver a speech (12:05 UTC).
US - consumer price index (12:30 UTC).
On Wednesday, the US and UK calendars contain several important entries. I recommend paying more attention to the US inflation report.
COT (Commitments of Traders) report:
The COT report of June 1 on the British pound showed that the mood of the major players has sharply become more "bearish." During the week, the "Non-commercial" category of traders closed as many as 6,544 short contracts and opened only half a thousand long contracts. However, these changes did not affect the British exchange rate. It is still in an upward trend. Other categories of traders also did not behave too actively, and a total of an equal number of long and short contracts were opened during the reporting week. Thus, in general, the "bullish" mood remains, which is supported by the total number of open contracts for speculators: the number of longs exceeds the number of shorts twice.
GBP/USD forecast and recommendations for traders:
Purchases of the British dollar are recommended if there is a rebound from the lower border of the side corridor with a target of 1.4216. It is recommended to sell the pound if it is closed on the hourly chart under the side corridor with the goals of 1.4064 and 1.4008.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to support current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
